22 Sep 2024

 Unrelenting on its quest to promote food production and reduce food import bill, government introduced Temo Letlotlo and Thuo Letlotlo to spur production in the agriculture sector.

Government went further to revise the Agricultural Credit Guarantee Scheme (ACGS) in order to provide a comprehensive crops and livestock insurance coverage for both programmes.  

The scheme, managed and administered by Phoenix of Botswana Assurance Company, provides comprehensive coverage such as fire, poisoning, theft, transit mortality as well as weather-based insurance for crops.

“This insurance does not only cover crops and animals, it also gives confidence to investors into the agriculture sector,” said Phoenix of Botswana, chief executive officer, Mr Carlson Chiswo. Historically, agriculture insurance uptake in the country is low and only a few commercial farmers are insured while it is almost non-existent among small scale farmers. This, explains the inadequate production. “That is what is affecting food security in the country,” said Mr Chiswo, adding that Phoenix of

Botswana Assurance had extensive agriculture insurance, having undertaken the same in countries such as Zimbabwe.

The insurance is a positive occurrence for farmers, considering the country’s climatic conditions that include frequent dry spells that affect crops and livestock.

Agriculture insurance plays a catalytic role in complementing agriculture programmes and can spur the performance of Temo Letlotlo and Thuo Letlotlo.  “It is a stimulus to agriculture programmes,” said Mr Chiswo, who further noted that the insurance would facilitate farmers’ access to credit and transfer risks from farmers to the international market.

Ministry of Finance programme coordinator, Mr Kebitsang Powe said the scheme would provide livestock insurance to farmers to help them repay part of their  loans in case of livestock loss due to the occurrence of insured perils covered by the scheme.

“The company will cover claims for the 2024/25 ploughing season. As for Thuo Letlotlo, farmers shall be covered individually upon successful assessment of their application,” he said

He said Temo Letlotlo programme coverage was a weather-based crop package, which protected grain producers against weather perils.

The primary goal of the weather-based crop insurance is to expand insurance coverage for agriculture by developing new innovative insurance products beyond indemnity-based insurance to include weather index, area yield index, new variants of pests and disease insurance.

In addition, farmers who acquire seasonal loans through Temo Tlotlo are compelled to purchase weather-based crop insurance to manage risks associated with crop loss while Thuo Letlotlo farmers will be covered individually upon successful assessment.

ACGS was introduced in 1986 to reduce farmers’ debt to the participating financial institutions in the event of crop failure due to weather-related perils such as drought, hailstorm, frost and flood.

The revised scheme follows the ministry of finance consultants recommendation that the scheme be revised and extended to the private sector for optimal utilisation. ENDS